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| Secrecy breeds corruption and mismanagement |
Source: Revenue Watch Institute, November 5, 2012: http://www.revenuewatch.org/news/press_releases/sec-must-reject-oil-industry-assault-transparency
NEW YORK—The U.S. Securities and Exchange Commission (SEC) must reject oil companies’ demand for a delay in enforcing new disclosure rules, to carry out the law of the land and protect the public interest, the Revenue Watch Institute said today.
The American Petroleum Institute (API) and the U.S. Chamber of Commerce have asked the SEC to delay, or “stay,” new securities rules requiring oil, natural gas and mining companies to make public their payments to governments, until federal courts issue a verdict in a lawsuit recently filed by API and the Chamber. Representing major oil companies, API and its allies are demanding the courts overturn the rules as well as the underlying transparency law they carry out.
“API is making an extraordinary assault on corporate and government transparency,” said Daniel Kaufmann, president of Revenue Watch. “Based on its own clear criteria, the SEC has firm grounds for rejecting the oil industry’s stay request.”
“Suspending the rules would harm investors as well as citizens of developing countries, who stand to greatly benefit from greater transparency and accountability,” Kaufmann said. “There is no reason for the SEC to be intimidated by API into changing its well thought-out timeline, which calls for this greater company disclosure to begin in 2014.”
The rules carry out Section 1504 of the Dodd-Frank Act, passed by Congress in 2010, which requires companies listed on U.S. stock exchanges to report publicly their payments to governments, for each country and each natural resource project. In drafting the rules, the SEC solicited and considered extensive public comments for two years, including from the oil industry.
The law and SEC’s rules are also the template for transparency legislation being finalized by the European Union, and have been strongly endorsed by British Prime Minister David Cameron and other leaders.
Senators Ben Cardin (D-Md.), Richard Lugar (R-Ind.), Carl Levin (D-Mich.) and Patrick Leahy (D-Vt.), strong supporters of the disclosure law, have urged the commission to “deny the stay request, and actively resist any other attempt to delay the implementation of the rule.” They also cite the precedent that U.S. rules have set for the EU, warning that delaying their implementation will “cause harm to investors and citizens in the United States and abroad.”
Publish What You Pay, the leading civil society coalition involved in the SEC’s two-year rulemaking process, has also urged the commission to strongly defend its rules.
